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Many food manufacturers and retailers have made pledges to go "cage free." In fact, if all the pledges are maintained, about 75% of the entire egg laying flock will have to be converted to cage free by the year 2025, as the graph below suggests.

Is there sufficient consumer demand to support this level of commitment (particularly when one acknowledges that, according to USDA data, cage free eggs are currently selling at about a $1/dozen (or 68%) premium to conventional)?

I recently completed a study for the Food Marketing Institute, Animal Agriculture Alliance, and the Foundation for Food and Agricultural Research on the market potential for cage free eggs to help provide some insights into these issues.

The study was conducted with more than 2,000 consumers. The core of the study involved people making a series of simulated retail shopping choices like the one below.

Answers to these questions allow us to infer consumer willingness-to-pay, market shares, and more. In fact, if you want to run your own market share simulations, I created this handy downloadable spreadsheet.

The main finding is the following:

When provided no additional information, choices imply half of consumers are willing to pay no more than a $0.30/dozen premium for cage free eggs; however, the mean premium is $1.16/dozen, suggesting a small fraction of consumers are willing to pay sizeable amounts for the cage free label. Almost 60% of consumers have a willingness-to-pay for cage free less than $0.40/dozen, but 33% have a value greater than $1.00/dozen.

and

Ultimately, the results suggest there is potential for the market-share for cage free eggs to rise above the current state even at premiums as high as $1.00/dozen. However, even at much more modest price premiums, the potential for cage free eggs to attain majority market share is unlikely, particularly if conventional eggs advertise other desirable attributes. Completely removing more affordable conventional eggs will significantly increase the share of consumers not buying eggs.

Here are a couple key graphs:

and

There is much, much more in the full report, and you can also download the market share simulator here.